Market drivers and catalysts
Equities: US chips led gains, Europe lagged on oil pressure, while Asia split between AI enthusiasm and energy-importer stress.
Volatility: VIX near 19, Fed and earnings in focus, oil/geopolitical risk
Digital Assets: BTC steady, ETH softer, IBIT inflows, ETHA mixed
Fixed Income: Global yields edge higher with crude oil prices
Currencies: USD soft as global risk sentiment remains strong despite rising oil prices
Commodities: Oil grinds higher, gold stuck in neutral as US drought lifts wheat
Macro events: Bank of Japan meeting (early Tue.)
Macro headlines
The Federal Reserve is widely expected to keep interest rates unchanged at its policy meeting starting Tuesday, as energy prices remain elevated and supply chains are disrupted due to the Middle East war. The meeting will be Chairman Jerome Powell's last at the helm of the institution as his term ends mid-May. A new monetary policy statement and Powell press conference are up on Wednesday.
Friday, the US Department of Justice dropped its case against Fed Chair Powell, which had accused him of making false or misleading statements to Congress about the costs and other details related to the renovation of Federal Reserve headquarters. The dropping of this suit will likely accelerate the confirmation of Kevin Warsh as the next Fed Chair, as one Republican on the Senate Banking Committee, Thom Tillis, had vowed not to vote for Warsh until the case against Powell had been dropped, as he saw it as entirely politically motivated.
Peace talks between the US and Iran stalled over the weekend after President Donald Trump cancelled a planned trip by his top envoys to Pakistan. Iran, while maintaining it will not negotiate under threat, has reportedly presented the US with a new proposal that could pave the way for reopening the Strait of Hormuz, with nuclear negotiations deferred to a later stage to sidestep internal divisions within the Iranian leadership. Trump is expected to hold a Situation Room meeting on Iran later today.
U.S. year-ahead inflation expectations rose to 4.7% in April 2026 from 3.8% in March, just below the 4.8% preliminary reading, according to the University of Michigan survey. The five-year outlook edged up to 3.5%, the highest in six months, from a 3.4% preliminary estimate and 3.2% in March.
The University of Michigan’s Consumer Sentiment Index was revised up to 49.8 in April 2026 from 47.6 but remains at a record low amid the Iran conflict and related price pressures. Inflation expectations rose sharply, with the one-year outlook at 4.7% (from 3.8%) and the long-term outlook at 3.5%, the highest since October 2025.
Macro calendar highlights (times in GMT)
0600 – Germany May GfK Consumer Confidence
1430 – Dallas Fed Manufacturing Activity
2330 – Japan Mar Jobless Rate
0230-0400 - Bank of Japan meeting announcement, followed by press conference
Earnings this week
Monday: Verizon, Advantest, Cadence Design Systems, Nucor
Tuesday: Visa, Coca-Cola, Novartis, T-Mobile US, Airbus, Booking Holdings, S&P Global, Seagate Technology, BP, Starbucks, Spotify, Atlas Copco, UPS, Robinhood, Mondelez, General Motors, Bloom Energy
Wednesday: Alphabet, Microsoft, Amazon.com, Meta, AbbVie, AstraZeneca, TotalEnergies, Amphenol, Carvana, General Dynamics
Thursday: Apple, Samsung Electronics, Eli Lilly, Mastercard, Caterpillar, Merck, Amgen, Sandisk, Western Digital, Tokyo Electron, Royal Caribbean Cruises
Friday: ExxonMobil, Chevron, Linde, Mitsubishi
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The Nasdaq 100 rose 1.9% to a record close, while the S&P 500 gained 0.8% to another record and posted its fourth straight weekly advance. The Dow slipped 0.2%, showing how narrow the rally still was, with semiconductors doing most of the heavy lifting. Intel jumped 23.6% after strong results and better-than-expected guidance, while AMD rose almost 14.0% and Arm gained 14.8% as investors warmed again to AI and data-centre demand. Procter & Gamble added 2.5% after beating earnings estimates, though its warning on oil-related costs reminded investors that expensive energy has a long invoice.
Europe: The Stoxx Europe 600 fell 0.6% on Friday to 610.65 and lost 2.5% for the week, ending four straight weekly gains as Brent crude moved above USD 105 a barrel. The region’s earlier calm view of the Iran conflict started to fade, with investors focusing on Europe’s weaker position as a large energy importer. Energy names held up better on higher oil prices, while airlines, industrials and other energy-sensitive shares came under pressure. Markets now watch whether oil stays a sector story or becomes a broader margin problem.
Asia: Asian equities were split, with the Nikkei opening 0.3% higher at 59,880.71 and South Korea’s Kospi opening 0.9% higher at 6,533.60, while Hong Kong’s Hang Seng fell 0.7% last week to 25,978.07. North Asia continued to follow the AI and chip trade, with SK Hynix rising more than 7.0% to a record and Samsung Electronics gaining 2.5% after Intel’s strong outlook supported confidence in AI server demand. South and Southeast Asia looked less cheerful, as higher oil prices strained India, Indonesia and the Philippines. Same planet, different oil bill.
Volatility
Volatility eased slightly into the end of last week, with the VIX closing at 18.71 (-3.1%), but it remains elevated enough to signal that investors are still cautious despite equities pushing higher. The focus this week shifts firmly to macro and policy risk, with the Fed decision on Wednesday, inflation data (Core PCE), and a heavy earnings calendar led by major tech names all likely to drive sentiment. Geopolitics and oil prices remain an underlying risk, especially with ongoing tensions around Iran and supply concerns.
Based on current SPX options pricing, markets are implying an expected move of roughly ±120 points (≈1.68%) into Friday’s expiry, suggesting a potentially volatile week ahead.
For today’s expiry, the options chain continues to show downside skew, with near-the-money put implied volatility around 24–25% versus ~21% for calls, meaning investors are still paying up for protection rather than upside exposure.
Digital Assets
Digital assets are starting the week on a softer but stable footing, with Bitcoin around $77,900 (-1.0%) and Ethereum near $2,330 (-1.6%), reflecting a pause rather than a reversal in recent strength. Broader alt-coins are mixed, with Solana near $86 (-0.8%) and XRP around $1.42 (-0.6%), pointing to a market that is holding gains but lacking strong momentum.
Institutional flows remain the key driver: IBIT is holding steady near $44, continuing to benefit from sustained investor interest and growing derivatives activity, while ETHA trades near $17.5, with flows more mixed and less consistent.
On the derivatives side, recent options flow in crypto-linked equities (such as Coinbase and MicroStrategy) still shows a bullish bias, although hedging activity in miners suggests investors are not fully confident. The overall message is constructive but selective: institutional demand is still there, but it is not broad-based enough to drive a strong breakout yet.
Fixed Income
US treasuries rallied Friday as crude oil prices fell, sending the benchmark 2-year treasury yield more than four basis points lower to close the day and week just below 3.78%, yields backed up in early trading Monday as crude oil prices opened the week higher – with the 2-year yield pushing toward 3.80% and the benchmark 10-year treasury yield two basis points above its Friday close, trading 4.32%.
Japan’s short-dated government bond yields are steady ahead of the Bank of Japan meeting Tuesday, with the benchmark 2-year JGB yield near 1.36% and the market looking for guidance from the BoJ on its policy intentions, with the market pricing slightly better than even odds that the bank will hike the rate at its mid-June meeting. At the longer end of the curve, the recent rise in crude oil prices seems is driving yields back toward cycle highs. The benchmark 10-year JGB yields rose nearly three basis points Monday to just shy of 2.47% near the highest daily close since 1999.
Commodities
Oil continues to grind higher as the Strait of Hormuz remains effectively closed, extending disruptions across the Middle East that continue to tighten the availability of critical commodities—from crude, fuel and gas to metals, fertilizers and petrochemicals. Brent crude trades at a three-week high as efforts to revive peace talks have stalled, with an Iranian proposal reportedly calling for nuclear negotiations to be postponed to a later stage. Meanwhile, Goldman Sachs now expects Brent to average USD 90 in the fourth quarter, up from a previous forecast of USD 80, and above the current traded average of around USD 88.
Gold remains stuck in neutral within a broad USD 200 range around USD 4,750, with most intraday price action dictated by energy prices and the ebb and flow of headlines from the White House and the Middle East. The FOMC is widely expected to leave rates unchanged on Wednesday, while the path for Kevin Warsh to become the next Fed Chair appears to have opened after an investigation into cost overruns at the Federal Reserve was dropped.
Chicago wheat futures extended gains as worsening drought across several US growing states threatens crop output in the key Great Plains region, where dry weather is expected to persist through spring after below-normal rainfall already damaged some crops. Prices are also drawing support from a Middle East war premium, with disruptions to fertilizer and energy flows raising production costs for key agricultural crops.
Currencies
The US dollar weakened slightly on Friday and again on Monday after a modest gap higher on the open. EURUSD trades near 1.1725 and USDJPY near 159.30 ahead of a Bank of Japan meeting early Tuesday. There seems littles reactivity in the dollar to the news of the clearing of the DoJ case against Fed Chair Powell, which will likely quickly pave the way for the approval of Kevin Warsh as the new Fed Chair. As well, the correlation of the US dollar with crude oil price has weakened, as local highs in crude oil prices on the ongoing geopolitical uncertainty are not driving USD strength, perhaps as risk sentiment more broadly has ignored this development as well.
EURGBP trades at multi-week lows below 0.8665 ahead of ECB and Bank of England meetings this Thursday, likely as the 2-year EU-UK yield spread has fallen as well on the turnaround in forward BoE policy expectations since the war in Iran drove a massive rise in energy prices. Both the ECB and Bank of England are seen holding the policy rate steady this week, but likely to hike rates about fifty basis points this year on inflation concerns. The EURGBP range lows of note since July of last year extend to near 0.8600.
